"Fedcoin could offer a way for the Fed to move away from paper currency ... and there could be a real test of it in 2017."

Summit speaker Robert Schwentker, co-founder and president of Blockchain University, raised eyebrows at the summit when he referred to a theoretical cryptocurrency called Fedcoin.

Proposed by David Andolfatto, vice president of the Federal Reserve Bank of St. Louis, Fedcoin would be a fixed-rate cryptocurrency issued by the Fed. Built on a bitcoin-like anonymous communal algorithm, Fedcoin could be used to facilitate faster payments in the U.S. via blockchain technology, the distributed database behind bitcoin and other cryptocurrencies.

"Fedcoin could offer a way for the Fed to move away from paper currency ... and there could be a real test of it in 2017," Schwenkter said.

Next month, the Fed will accept proposals for technologies that can help the U.S. market implement faster, near real-time payments. And some of those proposals likely will leverage blockchain technology.

The Fed's View

Nevertheless, Jon Jeswald, vice president and payments strategy executive at the Federal Reserve Bank of San Francisco, noted during his summit presentation that the Fed is taking blockchain technology seriously. And he acknowledged that the Fed expects several proposals coming from the private sector for faster payments to be blockchain-based.

But he stopped short of saying the Fed supports the use of blockchain in the move to faster payments. "I won't say that we are leaning toward blockchain," Jeswald told me.

The Fed's Faster Payments Task Force is asking the private sector to submit technology proposals for review between April 1 and 15. The Fed will review these proposals to identify shortcomings and potential technology gaps that could prevent the U.S. from migrating to faster payments, Jeswald explains.

"The Fed is not going to promote one solution over another," he says "We just want to evaluate these solutions, so that we can identify gaps that we will publish in a report in March of next year."

I'll be covering all the latest developments in the move toward faster payments in the months to come.

EMV Shift and Chargebacks

EMV, not surprisingly, was another hot topic at our summit. The growth in chargebacks to merchants since the October 2015 EMV liability shift got quite a bit of attention.

David Matthews, general counsel of the National Restaurant Association, which represents more than 500,000 restaurants, grabbed attention when he contended that quick-serve restaurants have not yet been given realistic options for EMV deployment. That's because EMV chip transactions take too long and slow down the drive-thru line.

What's more, he said restaurants that don't yet accept EMV transactions have been getting hit with an exorbitant number of chargebacks for fraud since the October 2015 EMV liability shift date.

"Chargebacks started significantly increasing in October and November and they keep going up," Matthews said. "We don't feel like the banks are investigating these fraudulent charges [to determine if they are legitimately fraudulent or just consumers disputing charges] and instead are just putting everything back on the merchant."

Last year, Matthews said his association was not recommending that quick-serve restaurants and smaller restaurants and chains make the investment in EMV. That's because the association did not believe the expense associated with fraud would outweigh the expense of investing in EMV.

But given the number of chargebacks that are hitting the restaurant industry, Matthews said the NRA is second-guessing that recommendation. "These chargebacks were just much higher than what we ever expected."

I suspect the EMV transition will be an even hotter topic next month at our summit in Miami, where we are likely to learn more about how merchants plan to address the significant upticks in chargebacks they are seeing.

About the Author

A veteran journalist with more than 18 years' experience, Kitten has covered the financial sector for the last 11 years. Before joining Information Security Media Group in 2010, where she now serves as the Executive Editor of BankInfoSecurity and CUInfoSecurity, she covered the financial self-service industry as the senior editor of ATMmarketplace, part of Networld Media. Kitten has been a regular speaker at domestic and international conferences, and was the keynote at ATMIA's U.S. and Canadian conferences in 2009. She has been quoted by CNN.com, ABC News, Bankrate.com and MSN Money.